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The Registered Retirement Savings Plan (RRSP) isa plan in which you register investments in order to save money for your retirement. The plan is registered with the Canada Revenue Agency (CRA). An RRSP defers income tax. You do not pay tax on the income that accumulates in the plan, as long as it remains in the plan.

However, if you withdraw registered investments from the plan, you generally have to pay tax on any withdrawals. An RRSP must be converted into retirement income before the end of the calendar year in which you turn 71.*

Tax payers who have earned income, as defined under the legislation, or income eligible for a transfer to an RRSP. There is no minimum contribution age, and you can contribute up to December 31 of the year you turn 71.*

Your disciplined savings approach is immediately rewarded in the form of a tax refund or tax savings. Your investment returns are tax-sheltered, meaning they are not taxed as long as they remain in your plan.

When you reinvest your tax refund, it’s as though the government has lent you the money from your taxes interest-free, so that you can make it grow until you retire! You won’t be tempted to use your savings before you retire, since all withdrawals from the plan are taxed. Subject to certain conditions your RRSP is creditor proof in the event of bankruptcy. **

* Must have reached the minimum authorized age to enter into a contract in Canada. The legal age in Quebec is 16, and the legal age in the other Canadian provinces is 18. ** Except for contributions made to an RRSP contract that is subject to seizure in the 12 months prior to the bankruptcy. An RRSP can only be exempt from seizure if a preferred beneficiary has been designated. To find out more, speak to a legal representative (attorney or notary) about an analysis of your personal situation.